FTW January 11, 2002 ­
Even as Attorney General John Ashcroft today recusedhimself
from involvement in any Justice Department investigation into themushrooming Enron scandal, larger
conflicts of interest ­ potentially moredamaging
to the Bush Administration -- are becoming increasingly apparent.The conflicts involve the Chairman of the
Securities and Exchange Commission(SEC),
Harvey Pitt and the head of Congress’ investigative arm, the GeneralAccounting Office (GAO), David Walker.
Both agencies are charged withinvestigating
allegedly criminal behavior by the energy trading firm,once
the seventh largest company in America, which has now become thesingle
largest bankruptcy in world history and may soon become thelargest
financial and political scandal in American history.

As new revelations of
Enron’s unethical and insider-based improprieties,apparently
facilitated by more than $2 million in Bush campaign donations,continue
to flash across TV screens on a daily, sometimes hourly, basis --more serious allegations of criminal
money-laundering activities by arespected
financial expert suggest that what is already known about Enron’sbehavior is but the barest tip of a razor
sharp iceberg that could sink theBush
presidency.

Spokespersons for Pitt
and Walker both denied to FTW in interviews on January10
that there is any reason for the heads of these two agencies, long
regardedas the last and best
protections against unchecked government corruption, torecuse
themselves from Enron investigations even though their respectiveagencies have key statutory obligations to
investigate the growing scandal.

SEC Chairman Harvey
Pitt, who took office in August of this year, after mostof
the acts leading to the Enron collapse had been committed, was,
accordingto a Jan. 9, 2001 report
by the Center for Public Integrity, a partner inthe
law firm of Fried, Frank, Harris, Shriver and Jacobson. In that capacityhe represented accounting firm Arthur
Andersen, Enron’s auditor, whichdisclosed
in a press release dated yesterday, that “in recent monthsindividuals
in the firm involved with the Enron engagement disposed ofa
significant but undetermined number of electronic and paper documentsand correspondence related to the Enron
engagement.”

This is significant
because Andersen, one of the big five accounting firms,had
routinely signed off on falsified financial statements concealing almost$20 billion in “off-balance-sheet”
debt from stock and bond holders,regulatory
agencies and Enron employees. Many of Enron’s pre-bankruptcy20,000
employees were barred by the company from cashing in their 401(k)retirement plans, primarily consisting of
Enron stock, while keyexecutives
including Chairman Kenneth Lay, former President and CEOJeff
Skilling, and CFO Andrew Fastow reportedly personally made morethan
$1 billion selling Enron shares before the collapse.

SEC spokeswoman Christi
Harlan told FTW, “The Chairman filed an agreementthat
he would recuse himself from votes in any matters where he had aconflict
of interest. The investigation is being run by the enforcementdivision
and they keep him [Pitt] advised.

“Once the Commission launches an
investigation to go forward they just dotheir
thing. There’s no requirement for a vote until an action isrecommended.”

Harlan stated that the
enforcement division acts autonomously from any inputfrom
the Chairman’s office and that the head of the division has managementoversight for any investigations. This
appears to be a different SEC practicefrom
the long-respected partnership of SEC chairman Arthur Levitt andenforcement
director Richard Walker who were known as a team for theirsingle-minded
and thorough non-partisan investigation of securitiesviolations
in the 1980s and 90s. Walker was recruited by Deutschebankshortly
after the attacks ofSeptember
11th, 2001.

When asked if, in spite
of his past representation of Andersen, Pitt wasconfident
that there would be no conflict of interest or any resultantinfluence
on the Enron probe, Harlan said, “Absolutely!”

Comptroller General of
the United States David M. Walker, who heads the GAO,has
an even more obvious dilemma. Until November 9, 1998 he was a partner,board member and global managing director
at Andersen. As persistentquestions
bubble about Andersen’s possible complicity in Enron’s criminalfalsification offinancial
statements Walker’s past relationship with Andersen managementraises
a question about his own ability to investigate in an unbiasedfashion.

GAO spokesman Jeff
Nelligan told FTW, “There is no link, no reason to recuseat
all. When Mr. Walker was at Arthur Andersen he had nothing to do withEnron and he left well before all of this
took place. He’s been gone forthree
plus years now.”

The possibility that
Walker had no knowledge of Enron activities (Enron wasArthur
Andersen’s second largest account paying Andersen some $52 millionlast year) is questionable given his
position as a director and board member.And
the statement that he was not at Andersen when Enron’s financialstatements were being falsified is flatly
contradicted by a 2001 Enroncorporate
filing with the SEC (form 8-K) which states that “Enron willrestate
its financial statements from 1997 to 2000 and the first and secondquarters of 2001” to account for the
fraudulent or grossly negligentfinancial
statements given to the SEC by Enron executives and certified byAndersen.

Walker was on the board
of Andersen for almost two years while Enron wascooking
the books and Andersen was signing off on it.

Many of the Andersen
connections and possible improprieties have been notedby
Rep John Dingell (D), MI the ranking member of the House Energy andCommerce Committee. On December 5, 2001
Dingell wrote to Pitt with a seriesof
detailed accounting questions that, when addressed in any one of eightannounced Enron investigations, cannot
help but draw Andersen deeper intothe
controversy.

THE ENRON ADMINISTRATION

A January 3 letter from
Vice President Dick Cheney (former CEO of oilconstruction
giant Halliburton) to California Congressman Henry Waxmandisclosed
that between January and September of 2001 Enron executives,including
Lay, had met on six occasion with Cheney’s National Energy PolicyDevelopment Group. The letter did not
disclose details of the meetings butdid
reveal that the last such meeting occurred on October 10th just sixdays before Enron publicly announced the
hidden debt, triggering thecollapse
of its share price.

The October 10th
meeting was approximately two weeks before Enron’s Chair,Ken
Lay made calls, as reported by the Associated Press on January 10, toTreasury Secretary Paul O’Neil and
Commerce Secretary Don Evans to discussthe
fallout from Enron’s pending collapse. Lay is a long-time personalfriend of George Herbert Walker Bush and
has headed the company which hasgiven
over $2 million in hard and soft campaign donations to George W. Bushand the Republican Party since 1999.

A pending
constitutional crisis loomed this summer as the GAO and Waxman movedcloser to suing the Vice President for
refusing to let Congress know what hisenergy
task force was debating behind the same closed doors that proved to beno barrier for Enron. Waxman’s letters,
frequently copied to Dingell andWalker,
established a robust paper trail closing off avenues of escape forthe Administration in its repeated
refusals to cooperate.

A January 10th letter
from Waxman to Attorney General John Ashcroft inquiringabout
his acceptance or more than $75,000 in campaign contributions from Enronduring his 2000 Senate campaign from
Missouri was followed, within hours, byAshcroft’s
announcement that he would have nothing to do with the JusticeDepartment’s
investigation of Enron. However, Ashcroft has chosen the lessaggressive
investigatory tactic of creating an in-house task force toinvestigate
Enron, rather than empanelling a grand jury capable of bringingcriminal
charges.

As of press time the
Department of Justice has not returned a call from FTWasking
why the less aggressive approach was chosen.

Other Bush figures
connected to or having a financial stake in Enron includePresidential
advisor Karl Rove, U.S. Trade Representative Robert Zoellick(formerly
on Enron’s advisory council) and multi-millionaire Secretary ofthe Army Thomas White who is a former
Enron executive. Lawrence Lindsay,the
President’s economic advisor, formerly served on an Enron advisory
board.The newly elected Chairman
of the Republican Party (RNC), former MontanaGovernor
Marc Racicot, is Enron’s former chief lobbyist with the firm ofBracewell and Patterson. Racicot has
indicated that he will not sever hisrelationships
with the firm and may continue to lobby as he leads theRepublican
Party. As RNC he has unobstructed access to all key decisionsand
votes made by Republican members of Congress.

Racicot is not subject
to any governmental regulation or oversight because heis
not a federal employee.

Enron influence
throughout the Bush Administration is nearly ubiquitous.Several
news stories have reported that CEO Lay, who had supported Bushsince
his first run for Texas Governor has actually cast an imperialthumbs
up or thumbs down on cabinet-level appointees and key regulatoryofficials
including the head of the Federal Energy Regulatory Commissionwhich
controls electrical rates for providers and oil, gas and electricitymovements throughout U.S. markets.

CUTTING TO THE CHASE AND CLUES OF
GREATER CRIMES

When asked about
Justice’s decision to create a task force instead ofconvening
a grand jury, a former federal prosecutor with experience ingovernment
corruption and energy matters told FTW, on condition of anonymity,“I’m a little relieved by Ashcroft’s
recusal but a task force is not agrand
jury and cannot charge criminal offenses. There is still one or moresteps removed from actual criminal
charges. Given the evidence of criminalbehavior
a task force, then, is less than a perfect solution. It’s notreally
any solution.”

The former prosecutor
added that Andersen’s destruction of records, “isextraordinary.
Andersen has known for many months that documents in theirpossession
might very well become the subject of civil and criminaldiscovery.
It was incumbent upon Andersen, at the moment that it knew thatthese
documents might become a part of litigation, to suspend their recordsretention schedules. It was Andersen’s
lawyers’ duty to advise Andersen toerr
on the side of retention. That is considered ‘best practices’ forrecord retention in virtually every major
company. The decision makers whofailed
to flag the documents at the proper time critically ill served thepartnership.”

She told FTW, “The
fact that subpoenas were not issued months ago to obtainall
Enron Online off shore and onshore digital and paper trading records andcorresponding bank records defies logic,
unless one presumes that Enron'sgenerous
donations have bought them time for a shredding party thatprotects
all the beneficiaries of the real dollars that flowed through theEnron money pipeline. If my years working
on the clean up of BCCI and theS&L
crisis taught me one thing that I would communicate today to theshareholders,
retirees and employees who have been harmed, it is this:People
like the people on the board of Enron absolutely make money oninsider
trading, bid rigging and fraud, and they do so with help fromthe
highest levels. They are superb at financial fraud because they aresuperb at persuading people that they are
respectable and legitimate.The
money they steal buys a lot of respectability.

“Presume the worst form of fraud and
criminal enterprise is plausible. Ifnot,
then we are looking at gross negligence that, according to traditionalstandards of fiduciary responsibility, in
fact constitutes criminality andfraud.
Either way the specifics come out -- intentional fraud or grossnegligence
-- the Enron board and management are criminals. That is a fact.The rule of law says that they should be
held to the same standards ofaccountability
as the millions of people they and their institutions haveevicted
from their homes, thrown into jail, denied health care and jobs orhad burnt at the proverbial stake. The
rule of decency says that anyAmerican
who will continue to do business or associate with theseindividuals
is part of the culture of corruption that has neatlydisconnected
action from accountability.

“I will bet every last dollar I have
that Enron was the largest laundromat ofstolen
and tax evading dollars in American history and that the Department ofJustice's primary goal is cover-up --- to
make sure that the money traildisappears
forever.”

Fitts is also well
qualified to speak on issues of government impropriety.She
has recently successfully beaten a five-year Department of Justice
attemptto destroy her reputation
after she had discovered mismanagement of governmentfunds
and other improprieties at HUD in the mid 1990s. Her ordeal has recentlyresulted in statements completely
exonerating her and revealing that therewas
no legal basis for the government to have begun the investigations of
hercompany, Hamilton Securities,
in the first place. Emerging from the ordeal as arecognized
innovative thinker on economics, Fitts routinely consults withmajor
economic-financial research groups in the U.S. and Europe and has justparticipated in the New York Times drug
policy forum with Nobel Laureate,economist
Milton Friedman.

Mike
Ruppert, 49, was born in Washington, D.C. An Honors graduate of UCLA in
Political Science, he comes from a family rooted in intelligence and the
military. As an undergraduate he interned for LA Police Chief Ed Davis
and worked at 5 LAPD Divisions before graduating and becoming an officer
in 1973.

During Mike's five plus
years of active service, he received thirteen citations and four
commendations. Twice the CIA attempted to recruit Mike: the first time
just before he graduated and again after he was a highly praised field
officer and budding narcotics investigator. In 1977 he discovered CIA
bringing drugs into the U.S. through New Orleans in an operation
supervised by his then fiancée, a CIA agent. He began to speak out and
was forced out of LAPD in November 1978 after being shot at and
threatened. He has been speaking out publicly ever since. In 1981 he
spoke out about CIA and drugs inside the White House during a visit to
his college classmate Craig Fuller. Fuller later served as Chief of
Staff to Vice President Bush.

As a freelance writer
in the 80s he was published in The Los Angeles Times. Other stories
include more than 30 on drug and alcohol dependence. Mike is a past
member of the Board of Directors of the National Council on Alcoholism
for the San Fernando Valley.

Michael Ruppert is the
Publisher/Editor of “From The Wilderness,” a monthlynewsletter
read in 27 countries and by two committees and 20 members of theU.S.
Congress. He may be reached at mruppert@copvcia.com.The FTW web site is located at www.copvcia.com.

Reprinted with permission,
Michael C. Ruppert and From The Wilderness Publications www.copvcia.com